No action for infringement of unregistered geographical indication:
No person shall be entitled to institute any proceeding to prevent or to recover damages for, the infringement of an unregistered geographical indication.
It would not be deemed to affect the rights of action which is against any person for passing off goods as the goods of another person or the remedies with respect thereof.
In the case of an unregistered geographical indication, sub-section(1) enacts that no person shall be entitled to institute any proceeding to prevent or to recover the damages for, the infringement of an unregistered geographical indication. Sub-section(2) at the same time explicitly provides that there is nothing in this act would be deemed to affect the rights of action which is against any person for passing off goods as the goods of another person, or the remedies in respect thereof. In other words, the law provides that whole no infringement action will lie in respect of an unregistered geographical indication; it recognizes the common law rights of the owner to take civil and criminal action against any person for passing off goods of another person or the remedies thereof.
Action for passing off:
An action for passing off is based on common law of tort and is founded on the principle that “no man is entitled to represent his goods as being the goods of another man; and no man is permitted to use any mark, sign or symbol, device or means, whereby without making a direct representation himself to a purchaser who purchases from him, he enables such purchaser to tell a lie or to make a false representation to somebody else who is the ultimate purchaser”.
There is no definition of the expression “passing off” in the GI act or the trademarks act, 1999 or in the predecessor enactment, through the expression “passing off” is used in the following sections:
Section 20(2)- As indicated above, this section preserves the common law right of action against any person for passing off goods as the goods of another person provided by another person and recognizes the owner’s rights to obtain remedies under the common law.
Section 66(1)(c)- In this section, the right of a GI owner is recognised by entitling him to file a suit or an action for passing off arising out of the use by the defendant of any GI which is identical with or deceptively similar to the plaintiff’s GI in any court not inferior to a district court having jurisdiction to try the suit.
Section 67(3)(b) – This subsection sets out the circumstance in a passing off suit where the court shall not grant relief by way of damages or on account of profits for passing off action under GI act, 1999.
Thus, it would appear that an unregistered GI is placed on the same footing as a registered GI in respect of offenses, penalties, and procedures and in respect of all civil action as contemplated in section 66 and 67, apart from the specific provision in section 2(3).
The right in respect of geographical indication is an intellectual property right and is protected in the same manner as right in a trademark. The principles laid down in a passing off action based on a right in a trademark would be equally applicable in protecting an action based on a right in a geographical indication.
The law in this respect, therefore, both in letter and spirit, is laid upon the premise that, while it encourages fair trade in every way and aims to foster and not to hamper, competition, no one, especially a trader, is justified in damaging or jeopardizing another’s business by fraud, deceit, trickery or unfair methods of any sort. This necessarily precludes the trading by one dealer upon the good name and reputation built up by another.
The law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such action has to prove in order to succeed. These are 3 in number:
Firstly, he should establish the reputation or goodwill which has been attached to the goods or services he supplies, in the mind of the purchasing public by association with the identifying get-up (whether it consists of a brand name or a trade description or the individual features of labelling or packaging under the particular goods or services offered to the public such that the getup is recognised by the public as distinctive specifically of the plaintiff’s goods or services.
Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by him are the goods or services by the plaintiff.
Thirdly, he must demonstrate that he suffers or in a quintet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or service is the same as the source of those offered by the plaintiff.
Lord Justice Diplock referring to the development of law regarding unfair trade as actionable wrong stated the five characteristics thus
Made by a person in the course of trade
To the prospective customer or the ultimate consumer of services or goods supplied by him, that has been calculated to injure the business or goodwill of another (in the sense that this is a reasonably foreseeable consequence) and
Which causes actual damage to a business or goodwill of a trader by whom the action is brought;
The lord further observed although the plaintiff and the defendant were not competing traders in the same line of business, a false suggestion by the defendant that their business was connected with one another would damage the reputation and thus the goodwill of the plaintiff’s business.
In the very case, Lord Justice Fraser quoted a passage from the speech of Lord Justice Dip lock: ‘Whatever doubts there may have previously been as to the legal nature of the rights which were entitled to protection by an action for passing off in courts of law or equity, these were laid to rest more than 60 years ago by the speech of Lord Parker of Waddington in A.G. Spalding &Bros. v. A.W. Gamage Ltd., with which the other members of the House of Lords agreed. A passing off action is actually a remedy for the invasion of a right of property which is not in the mark, name or getup improperly used, but in goodwill or a business which is likely to be injured by the misrepresentation made by passing off one person’s goods as the goods of another.
Goodwill is the subject of proprietary right which is capable of subsisting by it. There is no independent existence apart from the business to which it has been attached.
The character is local and divisible; if the business is carried in several countries a separate goodwill attaches to it in each. So when the business is abandoned in one country in which it has acquired goodwill, the goodwill in that country perishes with it although the business may continue to be carried on in other countries.
Passing off not limited to goods:
It is plain that passing off, properly so called, is not confined to the case of sale of goods. A form of action which restrains a man from trading under a particular name is called passing off, though the defendant trader is not selling goods.
When a person chooses to trade under a name which is highly non-specific, which consist of simple words in common use in the general language of the people, he must take the consequences.
The only right of an individual or firm to the sole user of a trade name, as distinguished from a trademark is this. That when a name has become identified, by adoption and user, with a particular trade or manufacture or business, the person who so used or adopted it can obtain the aid of this court to restrain the use of it by others in such a way as to lead customers or the public to think that the trade or business of the person so using is his trade or business.
In Kirloskar Diesel Recon Pvt Ltd v. Kirloskar proprietary Ltd, the court observed that:
“In the case of a trading name, which has become almost a household word and under which trading name, a variety of activities are undertaken, a passing off can successfully lie if the defendant has adopted identical or similar trading name and even the defendant does not carry on similar activity. Even if the defendant’s activities in such circumstances are remote, the same is likely to be presumed a possible extension of plaintiff’s business or activities.